The Week Ahead: Expectations for double digit growth in S&P 500 companies for the 3rd and 4th quarter helped propel a winning week in the three major indexes. With consumer sentiment dropping sharply in August, Bush's approval ratings sagging, and the economy's growth rate slowing further upside progress could slow. Look for housing stocks reaction to Tuesday's existing home sales report and Thursday's new home sales report. Also, Thursday brings the jobless claims report and durable goods orders.

Stocks to Watch: Ford Motor (F) appears to have completed its recent uptrend after announcing the biggest production cut in 2 decades of 20% in the 4th quarter and having its debt further downgraded. Look for related weakness in the auto supply company's like Borg Warner (BWA), Lear (LEA), and Visteon (VC). Momentum in MSFT shares since June was bolstered by the company announcing a $16.2 billion buyback of its shares on the open market. An open chart gap near 26.94 could be filled.

Special Note: Signs of intermarket bearish divergences are going on not only in European and Pacific Rim indexes but here in the U.S. as well. For instance, the Dow and S&P 500 are at there highest levels since early May yet the Nasdaq is still below its June and July highs. This combined with declining volume since the mid June lows indicates an increased likelihood of a top forming here. Therefore market strength can be used to lock in profits and look for new opportunities.